Explanatory Statement
Appropriation Act (No. 4) 2003-2004, subsection 12(2) – Reduction of appropriations from prior years upon request
Appropriation Act (No. 3) 2003-2004, subsection 10(2) – Reduction of appropriations from prior years upon request
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) entitled “Determination to Reduce Appropriation Upon Request”, dated 26 June 2007 and numbered 19 of 2006-2007.
The legislative authority under which the instrument is made
Section 12 of Appropriation Act (No. 4) 2003-2004 enables the Finance Minister to make a determination reducing an administered assets and liabilities item or an other departmental item for an entity upon receipt of a written request from the Minister responsible or, in the case of an entity for which the Finance Minister is responsible, the Chief Executive.
Section 10 of Appropriation Act (No. 3) 2003-2004 enables the Finance Minister to make a determination reducing a departmental item for an entity upon receipt of a written request from the Minister responsible or, in the case of an entity for which the Finance Minister is responsible, the Chief Executive.
The provisions were included in the Appropriation Acts to enable excess departmental appropriation items to be extinguished.
Excess appropriation may arise where, for example:
- An amount is reclassified and appropriated again under another kind of appropriation;
- Efficiency savings result in a programme costing less than expected; and
- A programme under Government policy is abolished prior to the appropriation being expensed.
In accordance with subsections 12(7) and 12(8) of Appropriation Act (No. 4) 2003-2004 and subsections 10(6) and 10(7) of Appropriation Act (No. 3) 2003-2004, a determination issued by the Finance Minister cannot reduce an appropriation item by more than the lesser of the amount requested by the responsible Minister or Chief Executive (as appropriate), and the balance of the appropriation item remaining in the Consolidated Revenue Fund.
Purpose of the instrument
The instrument directs that equity injections for the Department of Foreign Affairs and Trade (DFAT) in Appropriation Act (No. 2) 1999-2000 be reduced by $368,000. The instrument also directs that departmental items for DFAT in Appropriation Act (No. 1) 2001-2002 be reduced by $23,064,001.
Background
On 30 May 2007, the Minister for Foreign Affairs (the Minister) wrote to the Minister for Finance and Administration seeking a reduction of DFAT’s equity injections in Appropriation Act (No. 2)
1999-2000 by $368,000. This funding is not required as DFAT and another agency within the portfolio received capital appropriation for the same purpose.
The Minister is also seeking a reduction of DFAT’s departmental items in Appropriation Act (No. 1) 2001-2002 by $23,064,001. This reduction is comprised of foreign exchange gains and surplus capital use charges.
Notes on the instrument
The instrument provides that the appropriation item in column 1 for the entity in column 2 is reduced in response to a request made by the Minister in column 4 by the amounts listed in column 6.
In accordance with the Legislative Instruments Act 2003, DFAT has been consulted in the preparation of this instrument.